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India Government Rice Procurement Reaches 26 Million Tons; Domestic Rice-Based Inflation Touches 17%

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Indian government agencies have procured almost 26 million tons of rice from the ongoing Kharif Marketing Season (KMS 2012 to 2013). According to the Ministry of Consumer Affairs, Food and Public Distribution, total rice procured until January 14, 2013 is about 6% more than the rice procured during the same period of the previous season.

So far, the Indian state of Punjab accounts for about 8.5 million tons, Chhattisgarh for about 3 million tons, Haryana for about 2.5 million tons, Andhra Pradesh for about 2 million tons, and Odisha for about 1.1 million tons of rice. The Indian government is targeting total procurement of 40 million tons of rice in 2012-13 (October to September), up about 14% from 35 million tons of rice procured in 2011-12.

Meanwhile, India’s Wholesale Price Index (WPI)-based inflation for rice stood at about 17.1% in December 2012, much higher than about 1.17% recorded in December 2011, according to the Ministry of Commerce.

The index for rice rose about 15.56 points since March 2012, a reflection of the 16% hike in minimum support prices announced by the government for the 2012-13 Kharif (main) rice crop. The WPI-based inflation for rice may rise further in the coming months as production from India’s main rice crop is expected to decline about 5% while rice planting area of the secondary rice crop (which accounts for around 15% of total annual rice production) is trailing about 26% from last year.

For the month of December, 2012, the WPI-based inflation for all ccommodities stood at about 7.18%, down from 7.74% in December 2011, the Ministry of Commerce said.

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